The Arvada Urban Renewal Authority announced a proposal to reimburse redevelopment infrastructure costs to the developer at Arvada Plaza site.
The $5.8 million is AURA’s portion of necessary infrastructure improvements, which must occur at Arvada Plaza at West 58th Avenue and Independence Street regardless of the tenant, said AURA Executive Director Maureen Phair.
Under the proposed agreement, IRG, Industrial Realty Group of Downey, Calif., will pay all $9.1 million for the redevelopment upfront; AURA will then reimburse the developer for $5.8 million, and IRG will pay $3.3 million.
“In order to redevelop the site, these improvements would have to happen, end of story,” Phair said.
The money will come from a Public Improvement Fee instituted on the retailer — in this case Walmart — in lieu of the city’s portion of the sales tax.
Sales tax in Arvada is 8.06 percent with 3.46 percent the city’s portion, Phair said.
Pending the approval of an agreement by City Council, 3 percent of the sales tax will become a PIF and the 0.46 percent sales tax that goes to the police department will remain the same.
Money from the PIF will be reimbursed to IRG, not Wal-Mart, until it reaches $5.8 million or 12 years have passed. Phair said she expects the $5.8 million to be paid in full in six to seven years.
“This is new money,” Phair said. “It’s not something coming from the city’s general fund or AURA’s general fund. The tenant of the project, Walmart, is going to generate the sales tax and that is new sales tax that is not being generated today. Unless we made these public improvements, we would not have a tenant in there.”
Improvements include remediation for asbestos and ground water contamination, site regrading and stabilization, demolition of the current facility, storm drainage work, water connection completion, relocating a sanitary sewer line, street widening on Ralston Road and Independence Street, street narrowing on 57th Avenue, new streetscape and consultation for the improvements.
Several other projects in Arvada have had tax-sharing agreements, including $9 million for Costco in 2000, $15 million for Arvada Ridge in 2005 and $3 million for Target at Arvada Ridge in 2007.
Other projects across the metro area to use a PIF for redevelopment include Belmar in Lakewood, which is $175 million; and Cabela’s in Thornton, which is $27 million.
According to AURA, public participation, such as a PIF for larger projects, is usually 20-25 percent of the total project cost; the redevelopment of the Arvada Plaza is about $25 million, meaning the public contribution from AURA is about 23 percent.
Some of the other projects in the area add the PIF onto the existing sales tax, including Belmar, which added an additional 2.5 percent to the existing tax.
Consumers in Arvada will end up paying the same amount in sales tax for shopping at the proposed Walmart as they do at any other retailer in the city, Phair said.
The redevelopment of the Arvada Plaza is the first step to redeveloping the Arvada Triangle area, Phair said.
AURA is hoping to redevelop the north side of Ralston Road west of the new Ralston Central Park as well with mixed-use development including residential and commercial development and perhaps a recreational facility.
AURA already owns some of the property and can purchase more in 2016. Safeway, which is located on the north side, announced on June 21 that it will close on July 15.
Because the Arvada Plaza, and the whole Arvada Triangle area, is an urban renewal district, tax revenue generated above what it made in 2002, the year before it became a designated district, goes to AURA. Tax revenue has declined each year since the Arvada Plaza became an urban renewal district.
Some residents, though, don’t agree with AURA’s proposal to council of a PIF.
“We obviously don’t think this is the way to go,” said Dave Chandler, a representative with the grassroots group Stop Arvada Walmart, a group opposed to the proposed Walmart with more than 260 Facebook members. “The proposal enriches special interests as the public’s expense by diverting $5.8 million that would that would go into the city’s general fund if Walmart and IRG were held to the same free enterprise standard as any other land owners or businesses.”
Chandler also said he thinks it is unfair to existing businesses that have had to suffer for six years while IRG did not do needed improvements to the Arvada Plaza and now will not receive a sales tax rebate for improvements they need.
City Council will host public hearings on the Walmart application, the cooperation agreement to permit the PIF and a credit ordinance allowing the sales tax to be credited for a set time at 6:30 p.m. Monday, July 15, in the Council Chambers at City Hall, 8101 Ralston Rd.
For up-to-date information on the Arvada Plaza redevelopment, visit www.ArvadaTriangle.org.